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Unemployment Duration, Incentives and Institutions - A Micro-Econometric Analysis Based on Scandinavian Data

Author

Listed:
  • Røed, Knut

    (The Ragnar Frisch Centre for Economic Research, Oslo, Norway)

  • Jensen, Peter

    (Department of Economics, The Aarhus School of Business, Denmark)

  • Thoursie, Anna

    (Swedish Trade Union Confederation, Stockholm, Sweden)

Abstract

Based on a combined register database for Norwegian and Swedish unemployment spells, we use the ‘between-countries-variation’ in the unemployment insurance systems to identify causal effects. The elasticity of the job hazard rate with respect to the benefit replacement ratio is around -1.0 in Norway and -0.5 in Sweden. The limited benefit duration period in Sweden has a large positive impact on the hazard rate, despite generous renewal options through participation in labour market programs. Compulsory program participation seems to operate as a ‘stick’, rather than a ‘carrot’, and is therefore an efficient tool for counteracting moral hazard problems in the benefit system.

Suggested Citation

  • Røed, Knut & Jensen, Peter & Thoursie, Anna, 2002. "Unemployment Duration, Incentives and Institutions - A Micro-Econometric Analysis Based on Scandinavian Data," Working Paper Series 3/2002, Stockholm University, Swedish Institute for Social Research.
    • Handle: RePEc:hhs:sofiwp:2002_003
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    References listed on IDEAS

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    Cited by:

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    2. Hägglund, Pathric, 2007. "Are there pre-programme effects of Swedish active labour market policies? Evidence from three randomised experiments," Working Paper Series 2/2007, Stockholm University, Swedish Institute for Social Research.

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    More about this item

    Keywords

    Unemployment spells; unemployment compensation; non-parametric duration analysis.;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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